Clear regulation is needed at a local level to drive mobile banking services in emerging markets, while in developed regions such services mean children aged five and under may never own a physical wallet, industry experts told Mobile World Congress delegates this week.
Speaking at the mobile money keynote, Kristin Skogen Lund, executive vice president and head of digital services and Nordic at Telenor, explained that telcos are best placed to offer mobile banking services in developing regions, but that the success of such services requires stable local regulations.
Lund referred to Easy Paisa, Telenor’s mobile banking service in Pakistan, which handled 30 million transactions in 2011 and already has 18,000 participating outlets – double the number of branches offered by traditional banks in the country. The low overheads delivered by the virtual set-up means the operator’s charges are a fraction of those from regular banks – just 5% of the cost incurred by banks.
“Few banks can match [that],” Lund states, adding. “Telcos are in a great place to bank the unbanked.”
Easy Paisa customers can set up an account in ten minutes or less, and cash is transferred instantly, compared to a typical two to three days for transactions conducted through banks. The approach is clearly paying off – last year the service handled $700 million-worth of transactions.
However, Lund pointed out Telenor’s Pakistan service has only been achieved thanks to clear regulations from the country’s central bank. Regulation is also important in developed markets, Lund said, noting that Telenor backs the GSM Association’s assertion that SIM cards are the best place for NFC to be embedded.
Telenor is also offering mobile wallet services in Sweden and Denmark, in conjunction with Tele2, Telia, Three and TDG.